Political Economy

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Terms in this set (...)

the original term used for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth.

Classical Liberal Theory

Limited government allows the invisible hand of the market to adjust prices so that consumers get what they want at cost from consumers. Relies on perfect competition between firms.

Market Economy

an economic system in which individuals and firms exchange goods and services in a largely unfettered manner.

Public Goods

those goods or services that cannot or will not be provided via the market because their costs are too high or their benefits are too diffuse.

Adam Smith

writer of Wealth of Nations, and founder of classical liberal theory.

Mercantilism

an economic doctrine based on the theory that a nation benefits by accumulating monetary reserves through a positive balance of trade, especially of finished goods.

Command Economy

an economic system in which most prices, property, and production are directly controlled by the state.

Keynesianism

Named for British economist, John Maynard Keynes, who argued that governments can reduce the "boom and bust" cycles of capitalism via active fiscal policy, including deficit spending when necessary

Deficit Spending

government spending more than is collected in revenue.

Import-Substitution Industrialization

Development policy popular in the 1950s-1970s that uses trade policy, monetary policy, and currency rates to encourage the creation of new industries to produce goods domestically that the country imported in the past.

Social Market Economy

in Germany, a postwar economic system that combines a highly productive market economy with an extensive and generous welfare state, as well as unusually active involvement of both business and labor in economic policy.

Developmental State

a state that seeks to create national strength by taking an active and conscious role in the development of specific sectors of the economy.

Economic Development

the process of increasing a country's wealth by diversifying the goods and services it produces and making that production more efficient.

Human Development

the process of expanding the choices people have to lead lives that they value. Well fed, health, safety from violence, being literate and numerate, enjoying political participation.

NICs

newly industrialized countries. These economies had become advanced enough to make a wide range of industrial products that are competitive in global markets, including steel, automobiles, and semiconductors. These countries while once being unindustrialized made significant economic progress and formed multinational corporations.

LDCs

Less developed countries. made some economic progress, but not to the same degree of NICs. most of them have had minimal or negative economic growth per person. Most are sub-saharan or southeast asian.

Gradualism

In politics, gradualism is the belief that change ought to be brought about in small, discrete increments rather than in abrupt strokes such as revolutions or uprisings. Gradualism is one of the defining features of political liberalism and reformism.

Export-Oriented Growth

an economic strategy used by some developing countries. This strategy seeks to find a niche in the world economy for a certain type of export. Industries producing this export may receive governmental subsidies and better access to the local markets. By implementing this strategy, countries hope to gain enough hard currency to import commodities manufactured more cheaply somewhere else.

State-Owned Enterprise

a legal entity created by a government to undertake commercial activities on behalf of an owner government. Their legal status varies from being a part of government to stock companies with a state as a regular stockholder.

Special Economic Zone

a geographical region that is designed to export goods and provide employment. SEZs are exempt from federal laws regarding taxes, quotas, FDI-bans, labour laws and other restrictive laws in order to make the goods manufactured in the SEZ at a globally competitive price.

Socialist Market Economy

The socialist market economy is the economic model employed by the People's Republic of China. It is based on state-owned enterprises and an open-market economy, and has its origins in Deng Xiaoping's ideological concept socialism with Chinese characteristics

National Champion

National champion is a political concept in which large corporations in strategic sectors are expected not only to seek profit but also to "advance the interests of the nation." This policy has been popular and practiced by many countries.

Authoritarian Developmental Regime

promote quicker economic development and support countries under threat from other countries, but fail to provide all rights to citizens. They often focus on industrialization to avoid loss of natural resources and unrest. South Korea and Taiwan both became this type after inheriting Japan's colonial bureaucracy.Focused on elites, giving away money to business, and offered few opportunities for citizens to voice their opinion, but transitioned to democracy under criticism.

Predatory Regime

rulers plunder without any regard for the welfare of the citizenry, like a predator and its prey. Nigeria. Foster neither economic nor human development. Resource curse often decreases the need to industrialize. Government controls resources.

Democratic Developmental Regime

regimes with strong commitments to creating democracy, encouraging economic growth and improving the capability of "poor and marginalized social groups." All groups agree in democracy and the needs of the poor are met while the wealthy are kept happy.

Fragmented Democracy

fragmented political parties, interest associations, and states. Patronage and the exploitation of ethnic, racial, religious, or regional identities helps a party gain power. These parties rarely act for the COMMON good. Emerge in areas with large inequalities and fractionalized groups.

Capitalism

the combination of a market economy with private property rights

Market Failure

Phenomenon that occurs when markets fail to perform efficiently or they fail to perform according to other widely held social values

Neoliberalism

A development theory supporting structural adjustment programs that argues developing countries should reduce the role of government and open themselves to global trade to allow the market to allocate resources to maximize efficiency and thereby economic growth.

Globalization

a rapid increase in the flow of cultural symbols, political ideas and movements, economic activity, technology, and communications around the globe.

Codetermination

a system in germany that requires unions to be represented on the supervisory boards of all German films of more than 2,000 employees.